OKLAHOMA CITY, March 16, 2016 /PRNewswire/ -- Foundation HealthCare, Inc. (OTCQB: FDNH), which is an owner and operator of surgical hospitals, announced today the Company's final financial results for the fourth quarter and year ended December 31, 2015.

Houston hospital acquired December 31, 2015. Expected to be immediately accretive to EBITDA.

"We are very pleased with the results of operations for 2015 and recognize this growth is driven by our unwavering commitment to patient care. We view this commitment as a key differentiator in our business model," said Stanton Nelson, CEO of Foundation HealthCare. "I am pleased to announce that our El Paso hospital was just awarded the Foundation Center of Excellence Award for Nursing Services. In 2015, our San Antonio hospital was awarded the Center of Excellence for Orthopedics as well as the Blue Cross Distinction award for Bariatric Surgery. Our physician partners and our clinical teams continue to deliver an unparalleled level of quality which is why our patient satisfaction scores continue to be among the highest in the country."

"During the third quarter of 2015, we reached capacity in our San Antonio hospital and announced the construction of another operating room and the addition to two patient rooms for post-surgical care. This expansion, which will be completed this month, will increase our surgical capacity by 25 percent in San Antonio. Unfortunately, the construction during November and December did have an inhibiting effect on fourth quarter volumes and revenues," said Nelson. "In addition, our surgical volume in El Paso was modestly lower than expected during 4Q."

"We announced the acquisition of University General Hospital in Houston effective December 31, 2015," said Nelson. "We have subsequently rebranded the facility "Foundation Surgical Hospital of Houston." This facility is located in a great market and is an excellent addition to the Foundation family of surgically focused hospitals. In 2016, we expect strong growth due to continued solid performance in El Paso, the expansion in San Antonio and the addition of Foundation Surgical Hospital of Houston. We believe we have built an infrastructure that can support additional hospitals and we are actively seeking to add majority-owned surgical hospitals to our business."

Fourth Quarter 2015 Financial Results: Net revenues and equity in earnings of affiliates in the fourth quarter of 2015 were collectively $32.1 million, down 1.2 percent from $31.7 million in the fourth quarter of 2014. Our net revenues are composed of patient services, less our provision for doubtful accounts, management fees from affiliates and other revenue. Patient services revenue (net of the provision for doubtful accounts) increased $0.7 million, or 2.4 percent, to $29.0 million during the three months ended December 31, 2015 as compared to $28.3 million in the same period of 2014.

Operating expenses for the fourth quarter of 2015 were $32.3 million compared to $28.9 million in the fourth quarter of 2014. The increase is due primarily to increased purchased services cost directly related to the increased net revenues generated from ancillary services.

During the fourth quarter of 2015, Foundation reported a $2.8 million gain (net of income taxes) on the sale of its 20% interest in the real estate of the Sherman, Texas hospital. The operating unit of the Sherman hospital was sold in the second quarter of 2015.

Our operations resulted in a net income attributable to Foundation HealthCare common stock of $1.6 million during the fourth quarter of 2015, compared to a net income of $1.2 million during the fourth quarter of 2014.

Adjusted EBITDA was $3.0 million for the 2015 fourth quarter compared to $4.7 million in the fourth quarter of 2014. This was primarily related to the lower surgical volume in San Antonio and El Paso.

Year-To-Date 2015 Financial Results: Net revenues for the year ended December 31, 2015 were $127.5 million, up 22 percent from $104.8 million reported for the year ended December 31, 2014. Patient services revenue (net of the provision for doubtful accounts) increased $23.7 million, or 26 percent, to $114.8 million during the year ended December 31, 2015 as compared to $91.1 million in the same period of 2014.

The increase was primarily due to increased revenue at our El Paso hospital generated by more complex cases and increased revenues from ancillary services.

Operating expenses for the year ended December 31, 2015 were $121.3 million compared to $101.6 million for 2014. The increase is due primarily to increased purchased services cost directly related to the increased net revenues generated from ancillary services.

Our operations, including the gain on the sale of our minority interest in the Sherman, Texas hospital and real estate resulted in a net income attributable to Foundation HealthCare common stock of $5.2 million during the year ended December 31, 2015, compared to a net loss of $2.1 million during 2014. Net income per Foundation common share for the year ended December 31, 2015 was $0.30 compared to a net loss of $0.12 per share in the prior year.

Annual Adjusted EBITDA as of December 31, 2015 was $14.2 million compared to $10.6 million for 2014.

At December 31, 2015, cash and cash equivalents totaled $5.1 million, compared to $2.9 million at December 31, 2014.

Conference Call

Foundation's CEO, Stanton Nelson, and CFO, Hugh King, will host a conference call today, followed by a question and answer period.

The conference call will be broadcast live at the investor relations section of the Company's website at www.fdnh.com. Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. In addition, a replay will be available after the call at the Foundation website or by calling (877) 870-5176 using passcode: 10082263.

Foundation HealthCare's management seeks to operate each facility efficiently and effectively such that patients receive high quality, cost effective care. The Foundation team seeks to improve the performance of each hospital by recruiting physicians to operate in its facilities and incorporating additional ancillary services in their markets. These additional service lines, such as toxicology, wound care, sleep management, radiology and imaging, truly make the Foundation specialty hospital environment unique.

The Company is also an industry leading ASC management and development company focused on partnering with physicians and employees to create an outstanding patient experience, while maximizing partner and shareholder value.

Reg G disclaimer – reconciling GAAP Net Income with EBITDA and Adjusted EBITDA Foundation is providing EBITDA information, which is defined as net income plus interest, income taxes, depreciation and amortization expense and earnings or losses from discontinued operations, and Adjusted EBITDA which is defined as EBITDA plus impairment charges minus non-recurring gains. EBITDA and Adjusted EBITDA are a complement to our GAAP results. EBITDA and Adjusted EBITDA are commonly used by management and investors as a measure of leverage capacity, debt service ability and liquidity. EBITDA and Adjusted EBITDA are not considered a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing our financial performance. EBITDA and Adjusted EBITDA should not be considered in isolation or as an alternative to, or superior to, such GAAP measures as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in the news release in the accompanying tables. Since EBITDA and Adjusted EBITDA are not a measure determined in accordance with GAAP and is susceptible to varying calculations, EBITDA, and Adjusted EBITDA as presented, may not be comparable to other similarly titled measures of other companies.

Important Cautions Regarding Forward-Looking Statements This press release contains forward-looking statements that are based on the Company's current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the Company's expectations, forecasts and assumptions. These risks and uncertainties include risks and uncertainties not in the control of the Company, including, without limitation, the risk that Company will maintain enough liquidity to execute its business plan, continue as a going concern and other risks including those enumerated and described in the Company's filings with the Securities and Exchange Commission, which filings are available on the SEC's website at www.sec.gov. Unless otherwise required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.